This is part of a broader move in Russia to minimize dependence on the US dollar and other foreign currencies. Deputy Finance Minister Aleksey Moiseev floated the VAT repeal last fall as a way for Russians to repatriate their capital.

“You can see that the government is paying a lot of attention to capital repatriation. We have found that a lot of citizens want to repatriate their capital and invest it not into the banking system, but gold ingots. This is their right. The obstacle to this right now is VAT.”

According to RT, Sberbank Vice President Andrey Shemetov said lowering barriers to gold investment would give Russians an option to protect themselves from inflation. He added that in a time of geopolitical risks, the metal could be an excellent substitute for traditional investments in US dollars.

A second Russian bank official quoted by the Russian newspaper said eliminating the gold VAT supports the broader goal of de-dollarization.

As we reported last month, during a speech at the lower house of the Russian parliament, the CEO of the country’s key trading floor suggested Russian investors should replace investments they’ve made in dollars with gold.

“Let’s offer an alternative to the US dollar in the form of Russian gold, which we produce… investment gold,” Moscow Exchange (MOEX) CEO Alexander Afanasiev said.

Afanasiev said many super-conservative Russian investors have purchased dollars and they keep them “under the pillow thinking that it is the safest option out there.”

Fundamentally, gold and silver are money. But most governments treat precious metals as a commodity. They don’t accept it as payment. Worse than that, they tax it. Think about the absurdity of this policy.

Imagine if you asked a grocery clerk to break a $5 bill and he charged you a 35 cent tax. Silly, right? After all, you were only exchanging one form of money for another. But that’s essentially what state sales and capital gains taxes on gold and silver bullion do. By removing the taxes on the exchange of gold and silver, these states would treat specie more like money instead of a commodity.

Former congressman Ron Paul testified in favor of a repeal of Arizona’s capital gains tax on precious metals in 2017.

“We ought not to tax money – and that’s a good idea. It makes no sense to tax money.”

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